The wait for a Hermés, Birkin or Kelly handbag is two years and the cost is upwards of $7,000.00. For the astute there are two lessons or insights in that statement.
Even though demand is great the 2,000 craftsman at the luxury maker of handbags undergo three years of intense training before being allowed to make a bag.Says Patrick Thomas, CEO of Hermés, “consumer demand has grown so fast that we haven’t yet managed to reduce the waiting lists.” Evidently, no one has told Mr. Thomas that we are in the midst of the greatest recession since WW II.
Says Thomas, “If people buy a Hermés bag, they know it is going to last for 40 years. For them it is not only an expense – it is an investment”. Beginning as a saddle maker, Hermés is one of only a handful of companies that is growing in the financial downturn.
It continues to open stores – 12 last year and another 5 during the first six months of this year. It is still hiring mostly in production and sales. And sales in company-owned retail stores is up 19% the first half of this year. Yes sir, ‘people are not spending money’ says the mainstream press.
Hermés benefits from another seldom used sales strategy namely that of scarcity.Antoine Belge, an analyst at HSBC, says, “Hermés is consciously limiting production in order to benefit from a “scarcity” effect. A tactic other retailers and sellers could and should employ.”
More training for producers, not caving in to the fear in the economy, knowing who their customer is and catering to them, managing availability in order to support high prices and margins, creating an elite or cult following – all very smart things that marketers should study and learn from.
Yea, I know your business is different and you are wondering ‘what you can learn from a handbag manufacturer anyway’. Evidently a lot if you are smart and pay attention.